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How Realreal’s Accounting for Warrants Adds Volatility to Financial Results

How Realreal’s Accounting for Warrants Adds Volatility to Financial Results

Realreal (REAL) has disclosed a new risk, in the Accounting & Financial Operations category.

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The accounting method Realreal employs for its Warrants significantly impacts its financial results, as these are recorded as liabilities at fair value on the balance sheet. The Warrants are remeasured each balance sheet date, and changes in their fair value are reflected in the earnings for that period. This continuous adjustment for fair value fluctuations until the Warrants are exercised or expire introduces volatility, which may negatively influence Realreal’s quarterly and annual financial performance.

The average REAL stock price target is $11.00, implying 70.28% upside potential.

To learn more about Realreal’s risk factors, click here.

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